The Skinny on Having Higher Umbrella/Excess Liability Limits

April 14, 2017

The industry sectors we insure are big businesses in the U.S. For example, revenue in the hotel industry across more than 52,000 properties is estimated at $189-plus billion. This includes everything from limited service hotels to luxury full-service hotels and resorts. The restaurant industry boasts $1 million-plus locations representing 10% of the workforce with revenues of $799 billion. The community associations and the real estate sector are huge markets as well. Each of these niche markets require a total insurance solution to protect against an extensive list of exposures, including the potential for large claims losses, underscored by the examples of top verdicts provided by the National Law Journal.

In looking at some of these large claims losses, you can readily see the type of huge damages being awarded in cases involving catastrophic accidents and injuries at various operations – damages that far surpass the liability limits typically available under a primary policy. From an incident involving a uncovered pool drain’s vortex that entrapped and kept a child underwater ($104 million in damages), to a shooting at a restaurant that resulted in a patron’s paralysis ($59 million), the violation of a hotel guest’s privacy ($55 million in damages), and a collapsed apartment floor resulting in multiple injuries ($25 million), the need for a high-limit umbrella/excess program as the most effective method of protecting a company’s balance sheet is evident.

Without the proper excess insurance amounts in place to kick in after the limits on a primary policy are exhausted, an organization would be left with the burden of paying the remaining out-of-pocket costs or, depending on the company’s size, could be looking at bankruptcy. High umbrella limits are necessary to respond to the rising costs of lawsuits and the large awards being rendered by providing coverage amounts above and beyond the underlying liability policies. This is particularly so for businesses with high loss potential, a high profile, sizable sales, numerous assets, large auto fleets, worldwide presence, and significant public exposure.

We’re available to discuss our high-limit umbrella and excess program for the various industries we serve.